By David Clucas
Outdoor consumers who have grown accustomed to Sierra Trading Post’s (STP) website touting consistent 60-, 70- and 80-percent off deals have begun hearing a different tune from the discount outdoor retailer.
Executives at parent company TJX Cos. (NYSE:TJX) told investors on the company’s November 15 conference call that it is significantly shifting STP’s online strategy from one of heavy promotions to everyday value.
“We’ve been going through some learnings in terms of remodeling the business because the website was much more promotional than, as you can imagine, we would want it to be,” TJX Cos. President and CEO Ernie Herrman said on the call. “We have recently (a month ago) taken a big chunk of that and gone to everyday value.”
That matches more closely what STP is doing in stores, Herrman said. “We put in some new merchants there to help with the website business, which in the store end of the STP business we’ve actually been very happy with,” he said, adding that officials would provide more color to the changes at the end of the year.
For its fiscal 2017 third quarter ended October 29, 2016, TJX Cos. reported same-store sales at its retailers, which also include TJ Maxx, Marshalls and HomeGoods, rose 5 percent, compared to the same increase a year ago, largely thanks to increased traffic. The company reported its fiscal third-quarter net sales up 7 percent to $8.3 billion, with its net income slipping to $549.7 million, or 83 cents per diluted share, versus a net income of $587.3 million, or 86 cents per diluted share, during the same period a year ago. Officials said EPS was pressured by higher wages (up 3 percent), and would have been higher at 91 cents per diluted share excluding the negative impact of debt extinguishment and and a pension settlement charge.
At its Marmaxx division, which includes T.J. Maxx, Marshalls and Sierra Trading Post, net sales were up 6.6 percent to $5.3 billion. Same-store sales for the division rose 5 percent, but exclude STP and e-commerce sales. In the third quarter, the company added two STP stores, bringing its total up to 11 locations with about 300,000 square feet.
For its full fiscal 2017 year, TJX rose its EPS expectations to between $3.46 and $3.48 versus previous guidance of $3.39 to $3.43, albeit it expects its fourth-quarter EPS will come in slightly short of a year ago, between 96 cents and 98 cents, versus last year’s fourth-quarter EPS of 99 cents.
Photo courtesy Sierra Trading Post
